New South Wales has recorded 136 new community cases of Covid, the highest daily total of infections so far.
One person has also died due to Covid - an 89-year-old man.
Premier Gladys Berejiklian said today the situation in NSW, namely around south-western and western Sydney suburbs, is now regarded as a national emergency.
Fifty-three of today's cases were infectious in the community.
"There is no doubt that the numbers are not going in the direction we were hoping they would at this stage," Berejiklian said. "It is fairly apparent that we will not be close to zero next Friday.
"For that purpose and for that reason the New South Wales government will be taking action in relation to that," she said.
The Premier announced two local government areas in Sydney's west will be effectively locked out from the rest of the city in an attempt to contain the Delta variant.
Residents of Cumberland Shire and Blacktown will be prohibited from leaving their suburbs unless they are health or emergency workers, or are otherwise deemed "essential".
The affected suburbs are Cumberland, Maryland, Greystanes, Guildford, Pendle Hill, Girraween, Seven Hills and Blacktown.
The Canterbury-Bankstown, Liverpool and Fairfield local government areas also remain in a strict lockdown.
Berejiklian said government officials would be contacting community leaders in the affected areas to help residents understand the new rules.
She flagged there would be additional government support for these communities, though it is yet to be finalised.
"We will also be considering over the weekend and early next week measures to provide you support in different ways," she said.
The Premier also called for the federal Cabinet to refocus Australia's vaccination strategy, specifically to get more Pfizer doses for Sydney.
"What we have done as a government is refocus our efforts in distributing vaccines in south-west Sydney, we have a micro plan for how we will get not only more doses of AstraZeneca in arms, but we also have to acknowledge that that is a very young population in those communities, and we need at least more first doses of Pfizer," she said.
Of today's 136 new locally acquired cases, 77 are linked to a known case or cluster – 65 are household contacts and 12 are close contacts – and the source of infection for 59 cases is under investigation.
Fifty-three cases were in isolation throughout their infectious period and 17 cases were in isolation for part of their infectious period.
Fifty-three cases were infectious in the community, and the isolation status of 13 cases remains under investigation.
Earlier, NSW Health Minister Brad Hazzard confirmed today's cases would be higher than yesterday's record total of 124.
"There will be more [cases]," Hazzard told KIIS1065's The Kyle and Jackie O Show this morning.
"We need people in south-west Sydney to stop moving around. We need people to understand it's a dangerous virus."
Overnight, more exposure sites were added in Sydney's CBD, the southwest and inner west, while an alert now has been issued for the Byron Bay area, where sewage testing has found virus fragments.
At least 70 of yesterday's 124 locally acquired cases had spent some time in the community while infectious, with another 17 cases still under investigation.
Vic records 14 new community cases
Victoria today recorded 14 new locally acquired Covid-19 cases, all linked to known clusters.
Ten of the 14 were in quarantine throughout their entire infectious period. More information would be released later today, Victoria's Department of Health said on Twitter.
Queensland flight attendant infected
Meanwhile, a Queensland flight attendant has reportedly tested positive for Covid-19 after working across two Qantas flights between Brisbane and Longreach.
It is believed the crew member worked on QantasLink flights, QF2534 and QF2535, on July 11 but didn't leave the aircraft.
However, the new case has put the regional Queensland town on notice. Testing is already under way for all passengers at the local hospital.